Believes a Sale of Company is Best Way to Deliver Value to FSFR
Stockholders

March 09, 2016 08:00 AM Eastern Time

BOSTON--(EON: Enhanced Online News)--Ironsides Partners LLC and its affiliates (collectively, “Ironsides”),
one of the largest stockholders of Fifth Street Senior Floating Rate
Corp. (NASDAQ:FSFR) (“FSFR” or the “Company”) with a combined ownership
interest of approximately 6.4% of FSFR’s outstanding shares, today
announced that it has filed a definitive proxy statement with the
Securities and Exchange Commission for the election of Robert C. Knapp
and Richard W. Cohen to FSFR’s Board of Directors (the “Board”) at the
Annual Meeting of Stockholders on April 7, 2016. Ironsides is also
asking FSFR stockholders to vote to terminate the Company’s investment
advisory agreement with Fifth Street Management LLC (“FSM”), the
Company’s external advisor, which is controlled by the Company’s
founder, Leonard Tannenbaum.

In addition, Ironsides is mailing a letter to FSFR stockholders, along
with its definitive proxy statement, addressing the Company’s gross
underperformance, excessive incentive fees paid to its external advisor,
and dilutive stock offering, all of which have eroded stockholder value.
Ironsides recommends adding two independent and experienced candidates
to the Board, terminating the investment advisory agreement between FSFR
and FSM, and either selling FSFR or seeking a business combination with
another company to restore value at FSFR.

The full text of the letter is as follows:

March 9, 2016

Dear Fellow Stockholders of FSFR:

Ironsides Partners and its affiliates (“Ironsides”) are soliciting your
vote at the 2016 annual meeting of stockholders of Fifth Street Senior
Floating Rate Corp. (“FSFR”). We have nominated two highly-qualified,
stockholder-first candidates to the Board. We are also asking you to
terminate the Company’s investment advisory agreement with Fifth Street
Management LLC (“FSM”), the Company’s external advisor, which is
controlled by the Company’s founder, Leonard Tannenbaum.

FSFR has grossly underperformed while paying excessive incentive fees
and suffering the consequences of a horribly dilutive discounted stock
offering.Immediate change is required.

FSFR has been a disappointing investment, and as a stockholder – like
you – we find the underperformance unacceptable and are calling for
immediate action. We urge you to vote our GREEN proxy card to elect
our nominees and terminate the investment advisory agreement with FSM.

FSFR HAS PERFORMED POORLY AND TRADES AT A WIDE
DISCOUNT TO NAV

FSFR was listed in 2013 at an IPO price of $15 per share. The closing
price of FSFR shares on March 8, 2016 was $7.57, equating to a 50% price
loss in a few short years. Consider further:

FSFR stock trades at a discount of 33% to net asset value (“NAV”);

FSFR stock has produced a dismal negative 37% return since its IPO,
including reinvestment of dividends;

FSFR’s NAV per share has declined 25% from $15.13 at the end of the
first quarter following its IPO to $11.36 as of December 31, 2015;

FSFR has paid $8.3 million in incentive fees to its external
advisor through December 30, 2015, despite stockholders’ suffering
large capital losses.

By any measure FSFR has woefully underperformed, as demonstrated in the
following table:

(See: Total Return Table)

IMPORTANT HISTORY & BACKGROUND

FSFR, established by Leonard Tannenbaum, went public in July 2013. Mr.
Tannenbaum was originally the chairman and CEO of FSFR, but has since
resigned his positions. He remains chairman and CEO of Fifth Street
Asset Management, Inc. (“FSAM”), the parent of the Company’s external
advisor, FSM.

In July 2014, FSFR solicited stockholder approval for issuing shares
below NAV, as required by law, which was approved. In the proxy
materials, the Company offered three examples of possible issuance. The
largest, most dilutive example provided by the Company was for 1.7
million shares at a 25% discount to NAV. Having received stockholder
approval, FSFR proceeded to issue 22.8 million shares at a 15% discount
to NAV per share, or more than 13.4x as many shares as discussed in the
proxy! The shares outstanding more than quadrupled and as the chart
below shows, the Company’s share price never recovered.

(See: FSFR Share Price Chart)

Who benefited from such a dilutive offering? FSFR was not in distress,
it was under no compulsion to pay down debt and there was no compelling
market opportunity on the horizon. To make matters worse for
stockholders, despite raising so much fresh cash, FSFR cut its dividend
by 25% the following year. However, FSAM, the parent of the Company’s
external advisor controlled by Mr. Tannenbaum, conducted an initial
public offering in October 2014 – two months after FSFR’s very dilutive
offering. It would have been advantageous for FSAM to show growth in
assets under management prior to that IPO. Since that IPO, the stock
price of FSAM has declined by nearly 80%, and FSAM and Mr. Tannenbaum
are the subject of numerous legal challenges and class action lawsuits
alleging securities fraud.

It is clear to us that the market has lost faith in FSAM, and that
this loss of credibility, we believe, has dragged down the value of FSFR.

WHAT IS THE SOLUTION? SELL THE COMPANY!

Ironsides believes the best way to deliver value to all FSFR
stockholders is to sell the Company or seek a business combination that
could eliminate or materially reduce the discount to NAV.

It is true that most business development companies (“BDCs”) are trading
at discounts to NAV like FSFR. However, there are important
distinctions. Most BDCs make subordinated loans, often taking equity
interests like warrants and charging non-cash interest, referred to as
payment-in-kind or PIK interest. FSFR has a different strategy. It
invests in first lien senior secured floating rate loans which pay cash
interest only. This makes FSFR easier to manage than the typical BDC. It
is the reason why FSM charges FSFR a 1% management fee while many other
BDCs, including historically its sister vehicle managed by FSM, are
charged a 2% fee. Because FSFR’s portfolio is less risky than most
BDCs, and because its management fee is 1%, its poor performance and
wide discount are all the more perplexing.

Our solution is a sale of FSFR or a business combination that increases
FSFR’s stock price. Consider the following possibilities:

Several large BDCs trade at or above NAV, as shown in the table below.
We would gladly accept shares from any of these BDCs in exchange for
FSFR shares.

(See: Price/NAV Ratio Table)

If a BDC of this sort were to acquire FSFR at even a 10% discount to
NAV, or $10.22 per share, the result would be an immediate 35% gain to
stockholders!While we have not yet approached any such BDC and
there is no such assured transaction in hand, the substantial benefits
make it worth pursuing aggressively.

Numerous regional banks trade above book value and might be interested
in acquiring FSFR in a stock-for-stock transaction.

Recent activity in the BDC sector suggests that achieving gains for FSFR
stockholders through a business combination transaction is feasible.
When Pennant Park Floating Rate Capital announced its agreement to
acquire MCG Capital in April 2015, the premium paid was 18.5% over
market price. When TPG Specialty Lending announced a proposal to acquire
the shares of TICC Capital in September 2015, the premium was 20% over
market price.

FSM MUST BE TERMINATED

If our objective is to sell FSFR and thereby achieve an immediate uplift
in value, why are we proposing to terminate FSM, the external advisor?
The answer is that FSM has been paid lucrative incentive fees even as
stockholder value has nosedived. It can therefore be expected to
vigorously oppose any business combination that would result in the loss
of its lucrative management contract with the Company. The Investment
Company Act of 1940 gives stockholders the right to terminate an
external manager on 60 days’ notice without penalty, and we urge our
fellow stockholders to join us in exercising that right to terminate
FSM. In its proxy materials, the Company threatens dire consequences if
FSM is terminated. We urge you not to be misled by the Company’s
rhetoric, and ask that you refer to the Ironsides materials for a
rebuttal of the Company’s scaremongering.

IMMEDIATE CHANGE IS NEEDED – NOW IS THE TIME
FOR STOCKHOLDERS TO TAKE ACTION!

FSFR stockholders should not passively accept painful investment losses.
Something can be done. Please join us in taking a first step towards
restoring stockholder value. Please vote your GREEN proxy card to
elect the Ironsides nominees and to terminate FSM as the Company’s
investment advisor.

Ironsides Partners LLC is an investment management firm and
SEC-registered investment adviser based in Boston, Massachusetts. The
firm was founded in 2007 by Robert C. Knapp, who serves as Managing
Director.

Ironsides Partners LLC, Ironsides Partners Special Situations Master
Fund II L.P., Ironsides P Fund L.P. (collectively, “Ironsides”), Robert
C. Knapp and Richard W. Cohenmay be deemed to be participants in
the solicitation of proxies from Fifth Street Senior Floating Rate Corp.
(“FSFR”) stockholders in connection with the 2016 annual meeting of FSFR
stockholders.Information about Ironsides is set forth in the
definitive proxy statement filed by Ironsides with the SEC on March 9,
2016.

Collectively, Ironsides beneficially owns 1,877,056 shares of FSFR
Common Stock, or approximately 6.4% of the FSFR shares outstanding.Ironsides
Partners Special Situations Master Fund II L.P. beneficially owns
directly 876,453 shares of FSFR Common Stock; an account managed by
Ironsides Partners LLC owns directly 181,691 shares of FSFR Common
Stock; and Ironsides P Fund L.P. owns 818,912 shares of FSFR Common
Stock.Mr. Knapp and Mr. Cohen are nominees for election as
directors.Mr. Knapp may be deemed to beneficially own or share
beneficial ownership of the shares beneficially owned by Ironsides.

Ironsides has filed the definitive proxy statement described in this
announcement with the SEC and will mail the definitive proxy statement
and other relevant documents to FSFR shareholders.The definitive
proxy statement, and any other documents filed by Ironsides with the
SEC, may be obtained free of charge at the SEC's website at www.sec.gov or
by contacting fixFSFR@okapipartners.com.
Investors should read the definitive proxy statement carefully, before
making any voting decision because it contains important information.

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